Choosing the right business partner is as important as choosing a significant other to spend the rest of your life with. It begins with enthusiasm and high expectations and sometimes ends in litigation and war. When choosing a business partner, it is in your best interest to find out everything there is to know about the person, including getting to know their family, friends finances, and even what they like to do during their leisure time.
Here are some questions that you might want to ask before deciding if this partner is right for you:
1. What do I need from a business partner?
Your business partner should bring something new to the table. Opposites attract: if one person does not have exceptional public speaking skills, then his or her counterpart must possess this quality. However, if neither of you can master the art of speaking, this is a recipe for disaster. If you are too similar to each other, this may be comforting, but it is not what your business needs. It is crucial that the lucky candidate complement your skills and personality.
2. What are your potential partner’s living situations?
Does he/she have other obligations at home such as a family, wife or kids? Although this should not preclude this person from becoming your partner, it should be factored in when making your decision. Other obligations at home take away from focusing and committing to your business. A new business is like having a new born baby. You have to nurture and watch it grow. Your potential partner needs to be a person that can balance a healthy lifestyle with work and family. Most importantly your potential partner’s significant other must be on board with the whole “being poor” stage that most entrepreneurs go through. If your partner is having problems at home then rest assured these problems will reflect on your business. Talk to your potential partner’s wife/husband/life partner, and make sure they’re ready for the ride to financial freedom because getting there comes with a lot of hiccups.
3. What are the potential partner’s expectations on the time he/she will put in?
Partners do not have to input the same amount of time into their venture. It is common for one partner to put in more hours than the other. This is okay, but it is imperative that your partner is on the same page as to each other’s expected time commitments. How many hours a day does your partner expect to put into the venture, and do his/her expectations meet yours?
4. Is your potential partner just as committed as you?
A partnership — especially one between friends — can start off with fun and excitement. Both partners have to be equally committed to the success of the business. Both partners should have the same lofty goals and share a plan to reach that objective. If your partner is not as committed to the business as you, they may lose their enthusiasm and may bring the business down.
5. Do I really need a partner?
I’m a strong believer in partnerships, more so in the service industry business than others. Sure, you can hire someone to do what a partner can do, however employees will never work as hard as a person with equity in the business. It is vital that you understand your own personality. Do you need someone to motivate you, share ideas with, and be there with you? If so, you should find a partner that complements your behavior, as stated above. I also believe that your professional relationship with your partner should go beyond the office. If you see your partner at work only, this is a problem. You and your partner should enjoy each other’s company out of the office. Just like a wife and husband should enjoy a social life outside of their home. A business partnership is like a marriage. If you enjoy having your partner around, you will love coming to work every day. Life is short, create wealth with a business partner you love.
Now you have a partner but you wish you never met him/her…
What happens if we can’t work it out?
I always advise my clients to have a solid exit plan. Just like in a marriage, a breakup can get expensive and nasty very quickly. It is best to be prepared for the worst, early on in the beginning stages of your venture. The best time to address potential problems with your partner is at the beginning, before emotions run high. It is extremely important to have a solid shareholder holder agreement in a corporation, or an operating agreement in an LLC containing a well drafted exit plan. This will minimize the expense associated with a breakup and you might even leave off as friends (doubtful but hopeful). It is important to have a great start-up attorney. The first essential step to success is having a well-informed business attorney prepare all of the necessary start-up documents for you.
At Fisher Law Group, P.C., we will prepare all of these documents for you, so that you won’t have to worry about any bumps down the road. Contact Information: Fisher Law Group, P.C. 25 Broadway Fl 9 New York, NY 10004 (212) 256-1877.